AFL finances weather drugs scandal

The AFL is set to double its profit and hit a record mark in revenue this year, despite a turbulent season marred by several off-field controversies.

AFL chief executive
Andrew Demetriou
told Financial Review Sunday the league is set to exceed its budgeted forecast of $12 million net surplus and record revenue of about $440 million in 2013.

The league’s surplus for 2012 was $6.7 million from revenue of $425 million.

Demetriou said the league was able to find about $10 million in cost savings in the year to October 31 as well as additional revenue from an increase in crowds and commercial income, including its digital AFL Media unit.

In a wide-ranging interview on the eve of his 10-year anniversary in charge of the AFL and ahead of Saturday’s grand final, AFL boss Andrew Demetriou says he had no regrets about his or the league’s handling of the Essendon drug saga.
Photo: Wayne Taylor

“All the things we measure by – crowds, membership and ratings – it doesn’t [suggest] the off-field saga has affected our key measurements. You would prefer not to deal with the stuff that could damage our brand but you have to deal with that."

In a wide-ranging interview on the eve of his 10-year anniversary in charge of the AFL and ahead of Saturday’s grand final, Mr Demetriou said he had no regrets about his or the league’s handling of the Essendon drug saga and would not have acted any differently in hindsight.

He says the AFL Media unit, which produces digital content for the 18 club websites and the central AFL site, is growing quickly and will make a profit this year.

Push to close gap between rich, poor clubs

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Demetriou also said revealed the biggest priority for the AFL was closing the gap between the richer and poorer clubs through more revenue sharing and that the league was still seeking to find common ground with the owners of Etihad Stadium on a price the league would potentially buy it for.

In particular, this year has been punctuated by the six-month investigation into Essendon by the AFL and the Australian Sports Anti-Doping Authority regarding the club’s controversial supplements and conditioning program in 2011 and 2012.

Demetriou and the AFL have been criticised for seeming to rush ASADA into lodging an interim report before this month’s finals series and for using strong-arm tactics to coerce Essendon into accepting the heaviest penalties ever handed down, including a $2 million fine, a 12-month suspension for coach James Hird and loss of draft picks.

The AFL CEO says he would not, in hindsight, have changed his or the AFL’s approach, especially the tense negotiations that took place over two days in late August during which the AFL and Essendon, led by club president Paul Little, the former CEO of Toll Holdings, thrashed out the terms of the penalties.

“It’s not unlike that goes on, and obviously lawyers are involved, in plea bargaining. Whilst we were prepared to have it heard by the commission or in court, the fact was the other party were prepared to negotiate to come to an outcome."

“We make no apology for getting to an outcome to protect the sanctity of the finals.

Sometimes people don’t like that methodology. Its not deal-making per se. I can’t think of a day where we are not trying to work towards an outcome on various fronts It’s what we do."

Essendon tip-off suggestion ‘nonsense’

Demetriou also describes as “nonsense" various other allegations such as the suggestion the AFL tipped off Essendon before it submitted itself for the ASADA investigation in February or that the AFL leaked information to the media.

“It was all tactics and no strategy. It made no difference to the outcome."

Though a settlement was made late last week with Essendon club doctor Bruce Reid, who was one of four officials to originally charged with bringing the game into disrepute, the club still faces the possibility of its players being served infraction notices by ASADA.

Demetriou said, despite recent media reports, he has no knowledge that ASADA will soon charge the Essendon players.

As the grand final looms, Demetriou admits the AFL will be down more than $1 million on its forecast budget for the finals series due to large clubs such as Collingwood and Richmond losing in the first week of the finals.

He and the 18 clubs will meet on Monday to discuss what Demetriou believes is the biggest issue facing the league now, the growing disparity between the richest clubs and poorest.

Demetriou and a group of AFL executives toured the United States mid-year to study better ways to share revenue among clubs, which Demetriou says the league needs to ramp up. “We do agree that we need to share more revenue and centralise more revenue, and that we all want profitable clubs. Revenue sharing must be linked to the salary cap and we want a more even competition, which means lifting the lower clubs."

He says the league will move to implementing a new revenue sharing plan in time for the 2015 season. At least six clubs will post a loss this year, including expansion clubs GWS Giants and Gold Coast Suns.